At last count, the potential cost to U.S. taxpayers will be $12.8 trillion for the federal economic stimulus, bailout of financial institutions, purchases of toxic assets, financial aid to automakers, loan guarantees, tax breaks and other aid to fight the recession. The Federal Reserve, U.S. Treasury, Congress and the President have greenbacks flying off government printing presses, and as everyone except government decision-makers seems to know, that is a surefire recipe for inflation, especially the 1970s style.
The U.S. inflation experienced in the late 1970s was unique in that it occurred during peacetime. All previous inflation spikes were during wars. After the vigorous economic growth of the 1960s, inflation spiked to double digits and stayed there for three years—1979, 1980 and 1981, reaching a high of 13.5% in 1980.